(Note: I encourage you to read the previous posting in this blog to understand the full context of the implications of Taxmageddon on business sales before reading this posting. As stated in the previous posting, I did not start this blog to comment on current affairs. The need for exit planning is timeless and, for the most part, the need to plan for a business sale is not dependent on what’s happening currently. So this will be an unusual type of posting for this blog.)
A prequel (dream) excerpt of President Obama’s State of the Union Address:
“We all recognize that small business drives our economy. Small business owners create 70% of all jobs in our national economy. I was recently provided with astounding research that indicates there are approximately 7 million baby boomer business owners, yet only 20-25% of small businesses ever sell. I’ve been informed that the onerous tax implications of a business sale are one of the major reasons that elderly business owners never transfer their business. We cannot allow 75-80% of businesses to wither away.
We cannot afford to lose the millions of jobs those owners have created. As baby boomer business owners age, there is nothing more critical than having those businesses passed to the next generation of business owners, who with their entrepreneurial spirit and drive, can not only maintain existing jobs, but grow the businesses and create new jobs.
Although I am not backing down on my call for new taxes on the wealthiest among us, I recognize the need to exempt the taxation of small business owners who sell their businesses. Those owners are the heroes of our society. They deserve to be rewarded for the countless hours of sweat equity poured into their business. We absolutely have to make sure that retiring business owners are passing along their businesses to the next generation.
I call on Congress to immediately enact legislation to completely eliminate all taxes on the sale of a business, including making an exception within C-Corporation tax regulations where the tax implications are most devastating. While we may not be able to agree on many issues in our political undertakings, this is something we should all agree on. Let’s get this done next week.”
Do you like my dream?